SUV sales decline

Daiman Penny points to this:

John Mathews of Universal Toyota in San Antonio has witnessed the day that auto industry executives in Detroit said would never come.

“We are seeing people who are driving $40,000 Suburbans trading them in on $15,000 Corollas,” said Mathews, who manages a dealership in a state where big trucks and sport-utility vehicles rule the roads. “The last 30 days have been unlike anything I’ve ever seen in the automotive industry.”
washington post

Well, duh.

People who pay attention to economics have known that the effect of higher gas prices would be to make gas guzzlers obsolete. The fact this is happening as gas prices are rising is not really news. The fact that SUV resale prices are cratering…not news.

Consumers are smart. They don’t want to stop driving and they don’t wat to pay a couple of hundred dollars to fill up a land boat. You don’t need a Nobel Prize to figure that small car sales are going to rocket and a lot of big SUVs are going to be sitting on the lots for a very long time.

Written by jay on September 29th, 2005 with 3 comments.
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3 comments

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Get your own gravatar by visiting gravatar.com Sean
#1. September 29th, 2005, at 9:25 PM.

Hmmm…. It may be a good time for us to buy an SUV then. Where we live a 4WD vehicle with decent cargo capacity is a necessity.

Get your own gravatar by visiting gravatar.com Andrew burton
#2. September 30th, 2005, at 5:50 PM.

Unfortunately, I can’t quite afford to own two cars. And I need my big Toyota to drag around supplies and equipment for my business every week, to tow my boat on her trailer a couple of times a year and to drag a pile of kids and equipment to the mountains to go skiing several times every winter. The rest of the time it would make perfect sense to own a Miata.

Get your own gravatar by visiting gravatar.com M. Mortazavi
#3. March 3rd, 2006, at 8:36 AM.

Solving Detroit’s problem is easier than many imagine.

It’s called peace.

I’ve already described one scenario here:
http://blogs.sun.com/roller/page/MortazaviBlog?entry=how_to_solve_the_car.

Alfred Sloan put aside about $300 mil for reconversion of GM to civilian production after the Second World War. It didn’t quite work because GM went back to quite a large, almost continuous war production shortly after. However, there is no reason why it cannot be made to work.

Peace is far better than war for the econmoy.

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